Interio by Godrej, the second-largest business vertical of `16,000 crore Godrej Enterprises Group, is on expansion spree as it aims to contribute half of the group’s targeted `20,000 crore topline by 2029. Nyrika Holkar, executive director of Godrej Enterprises, tells Benn Kochuveedan the rebranding of Interio is aimed at cementing its leadership position in the `90,000 crore furniture/home interiors market and transform itself into a one-stop destination for modern living across homes and workspaces. Excerpts:
What is the rationale behind rebranding of Interio?
Our aim is to make great design accessible to a large customer base. As industry leaders, we’re placed to deliver on this promise with our end-to-end solutions from design and manufacturing to retail and service. New product innovations like configurable furniture platforms will allow customisation at scale, while a digital-first approach enables convenience and an immersive shopping experience for online customers.
We’re expanding retail customer focused (B2C) store counts by 300, while business-to-business (B2B) stores will go up by 200, taking total to 1,500 from present 1,000 stores by 2029. We’ll be investing `100 crore each to expand our retail and online sales verticals as well as into design and development of new products. With this, we start a new chapter as an aspirational lifestyle brand.
How was sales last fiscal and how have you been growing this fiscal so far? Is demand constraints in other segments affecting your business as well? How confident are you of achieving the `10,000 crore revenue target?
We closed last fiscal with about `3,400 crore, growing at 17%. With new products and faster expansion, we’ve a target of growing 25% annually through 2029, when we’d be a `10,000 crore brand. We are expecting to double our FY25 topline through this fiscal year and the next two and contributing half of the group revenue by then.
How do you look at start-up players in your sector, especially those offering furniture on rent? How much of the organised market, which is only 30% of the `90,000 crore market they control?
Start-ups come up with novel ideas but sustainability of those ideas from a business and a profit and loss perspective looks challenging. The rental furniture space looks a little baffling because it does appear like a trend but when you go and start offering, you see that there is no market worth targeting as the larger part of the market still wants to buy furniture.
In fact, we did experiment with renting but could not find a market that’s scalable and have failed.
You’ve big plans for online sales. Currently, who much sales come from online and where do you see this reaching as you have plans to invest `100 crore more into this vertical?
We get 15% from online where it is beginning online and is ending online. We’re expecting this to grow rapidly. We cover about 90% of pin-codes now and we expect to net 20-22% by 2029.
What are your investment plans?
We’ve invested `350 crore for expansion, mainly product development and plants. We’re investing `300 crore more over next three years, under which `100 crore each will go into three areas — to open 500 more physical retail stores, into the online vertical, and to design and development of new products. Put together, we are saying that in the course of next two-three years, this is the investment which is happening in the front-end as we have made adequate investments—to the tune of `350 crore in the back-end in setting up a new steel pant in Khalapur, buying machinery for our unit in Shirwal, among others.
What’s the typical margin in this business and how much you earned last year?
Margin varies so a blended average is 10-11%, but we are seeing it expanding to 15-16% now. Last fiscal we’d earned around `500 crore.
Can you give us a breakup of the Rs 16,000-crore topline of last fiscal?
For long the appliances business has been the largest and clocked close to Rs 10,000 crore in FY25, followed by Interio which had around Rs 3,400 crore. The rest came in from the other verticals primarily the locks and safety/vaults and the aerospace segments, which is taking a lot of capex as of now.
With over 3,400 acres, the Godrejs (Godrej & Boyce) are the largest private land lord in the city. What are your plans for its development, especially the 1,000 plus acres of land bank around your headquarters in the Vikhroli area? Is any manufacturing happening there now?
Yes, we’re preparing a master plan to systematically develop around 1,000 acres of the Vikhroli land bank over time prioritizing a harmonious blend of urban infrastructure with biodiversity. Yes we will continue to have manufacturing, all the aerospace, material handling, security work takes place in Vikhroli. Yes some of our manufacturing moved out, like let's say furniture, appliances, and even locks. But we have other businesses are, and also our warehousing business. Plus both the groups are headquartered in Vikhroli.
Is the family looking at taking any of the units public?
Nothing at this point of time. But we are always open.